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Home Blog Page 6450

TrustBanc Daily Stock Market Scorecard, 25th March 2020

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Today, expectations of the passage of a $2 trillion economic rescue package for the US sent waves of bullish sentiments across global markets. For a normal crisis, this package is huge enough to eliminate any threat of a recession. Sadly, COVID-19 is not a normal pandemic.

In a similar vein, Nigeria’s House of Representatives passed the Emergency Economic Stimulus Bill 2020, which, among other things, aims at providing temporary relief to companies and individuals from the economic consequences of the COVID-19 pandemic.

The All Share-Index (ASI) greeted these developments with a marginal decline of -0.05% to expand
the Year-to-Date (YTD) loss of the Market to -19.05%.

Other global indices:

  • FTSE 100 (UK) – up by 4.45%
  • Dax (Germany) – up by 1.79%
  • CAC 40 (France) – up by 4.47%
  • Nikkei 225 (Japan) – up by 8.04%
  • S & P 500 (US) – up by 1.15%

Market Breadth: Despite the bearish return of the ASI, market breadth registered a positive sentiment to produce 20 gainers compared to 7 losers led by TOTAL. NEIMETH on the gainers chart continues to attract the interest of investors since the CBN announced 100 billion intervention in healthcare loans to pharmaceutical companies. See the list of top gainers and losers below:

Market Turnover: GTB and ZENITH led the turnover chart as market activities declined by 29.27% in volume and 37.25% in value. Top ten trades are summarised below.

Have a great evening.

 

In The Midst Of The Storm, How Can CBN Impact Your Business, Company And Wealth?

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CBN Governorn, Godwin Emefiele

The Monetary Policy Committee (MPC) met on the 23rd and 24th March 2020, amidst heightened uncertainty in the global macroeconomic environment arising from major disruptions associated with the outbreak of the Coronavirus Disease (COVID-19) and the oil price war between Saudi Arabia and Russia.

As you may know, the MPC (a committee within the CBN) is responsible for formulating monetary and credit policies, attainment of price stability and support the economic policies of the Federal Government. The MPC also monitors internal and external economic conditions in formulating monetary policy directions.

In the light of current internal and external economic realities, please find below highlights of the latest monetary policy communique from the MPC and other policy insights that may affect your business in the days and months ahead as this crisis gathers momentum locally.

Background:

The committee noted the N3.5 trillion worth combined policy measures put in place as a stimulus to ameliorate the pains arising from the COVID-19 health and economic crisis. The measures include:

  1. Extension of the moratorium on CBN intervention facilities effective 1st of March, 2020. A significant move by the Bank to ease pressure on loan repayments.
  2. Reduction of interest rate on all CBN intervention facilities from 9% to 5% over the next one year.
  3. Creation of a N50 billion targeted credit facility for households and SMEs that have been particularly hit by COVID-19 pandemic.
  4. N100 billion intervention in healthcare loans to pharmaceutical companies, healthcare practitioners intending to build new hospitals and health facilities or expand existing ones to first-class health centres
  5. Regulatory forbearance to Banks to restructure terms of facilities in affected sectors
  6. Strengthening the LDR policy, which is encouraging significant extra lending from Banks.
  7. Activation of the N1.5 trillion InfraCo Project for building critical infrastructure
  8. N1 trillion in loans to boost local manufacturing, production across critical sectors and import substitution

The committee also noted the following:

  1. Uptick in inflation from 12.13% to 12.20% for the 6th consecutive month, driven by shocks to food prices as well as persistent infrastructural challenges.
  2. Growth in aggregate credit by N2.35 trillion since the inception of the LDR policy, reflecting the potency of the LDR policy
  3. Dismal performance of the equities market as the All-Share Index and market capitalization dipped by 19% and 12.57% respectively between 31st December 2019 and 24th March 2020.
  4. Continued resilience of the banking system due to the decline in NPLs while expressing confidence in the regulatory regime.

Outlook

  1. Increased deterioration in the financial market condition.
  2. Disruption to the global supply chain as a result of the COVID-19 pandemic.
  3. Decline in oil prices and non-oil receipts which will lead to a further decline in reserves.
  4. Subdued growth in 2020.

The Committee noted that these can be mitigated by:

  1. The effective response of the monetary and fiscal authorities.
  2. Recalibration of the 2020 budget.
  3. Sustained CBN interventions in selected sectors.
  4. Deliberate policies to diversify the economy.

Committee’s considerations

  1. COVID-19 pandemic resulting in further health and economic crisis.
  2. Decline in oil price and supply glut in the nearest future.
  3. Emergence of exchange rate pressure.
  4. Downward revision of the 2020 budget by N1.5trillion and oil price benchmark to $30/barrel.

Committee’s decisions

At the end of deliberations, the Committee was faced with three options – whether to tighten, hold or loosen.

Tightening will result in reduced inflation rate and support reserve accretion however, it will reduce money supply, credit creation, increase cost of credit and have an adverse effect on growth which has already been weakened by the pandemic.

On loosening, the committee felt that this decision will boost money supply but will not necessarily increase credit creation. It will have an adverse effect on inflation and also lead to exchange rate pressures as money supply rises.

In view of the aforementioned, the Committee decided by a unanimous vote to:

  1. Retain the policy rate at 13.50%
  2. Retain the asymmetric corridor of +200/-500 basis points around the MPR
  3. Retain the CRR at 27.5%
  4. Retain the Liquidity Ratio at 30%

This decision will offer pathways to appraise the effects of the CRR and LDR policy while also allowing the pandemic to wear off before determining the next course of action.

Other News Headlines:

COVID-19: Massive economic crises loom, says CBN
The Monetary Policy Committee of the Central Bank of Nigeria on Tuesday said the outbreak of the coronavirus pandemic would lead to massive economic crisis capable of throwing many countries into recession. The committee said the COVID-19 pandemic would not only result in health crises, but also massive economic crises that would force even leading industrialised countries into recession. Read more
COVID-19: Staying safe with cash-less banking
For years, Nigeria’s push towards a cashless economy was greeted with mixed feelings, but eight years after the Central Bank of Nigeria (CBN) rolled out the scheme, many people have come to realise that the gains outweigh the pains. With the ongoing COVID-19 pandemic, digital payment remains one of the ways to stay safe, with banks encouraging their customers to go cash-less. Read more
FG threatens businesses involved in arbitrary price hike
The Federal Competition and Consumer Protection Commission on Tuesday threatened to prosecute businesses involved in unfair competition practices through unnecessary increase in prices of their products. The commission said the warning became imperative following unnecessary price hike by sellers of basic health products as a result of the natural apprehension by consumers due to the spread of the coronavirus pandemic. Read more
COVID-19: Reps propose duty waivers, new tax regime
In a record time, the House of Representatives has passed the Emergency Economic Stimulus Bill, 2020, which, among other things, aims at providing temporary relief to companies and individuals from the economic consequences of the COVID-19 pandemic. The bill especially seeks to maintain the general financial wellbeing of Nigerians pending the eradication of the pandemic and return to economic stability. Read more
Stocks – Europe Continues Higher Amid Fresh U.S. Stimulus Hopes
European stock markets are set to open positively Wednesday, continuing Tuesday’s sharp ride higher, on the expectation that U.S. policymakers will finally deliver a massive rescue package to bolster the country’s beleaguered economy. Read more
Asia rides Wall Street surge as investors place hopes on U.S. stimulus
Asian shares extended their rally on Wednesday in the wake of Wall Street’s massive rebound as the U.S. Congress appeared closer to passing a $2 trillion stimulus package to mitigate the economic blow from the coronavirus pandemic. On Tuesday, MSCI’s gauge of stocks across the globe (MIWD00000PUS) rallied 8.39%, the largest single-day gain since the wild swings seen during the height of the global financial crisis in October 2008. It rose another 0.8% in Asia on Wednesday. Read more
Oil Prices Jump on Surprise Crude Draw
The American Petroleum Institute (API) estimated on Tuesday a crude oil inventory draw of 1.247 million barrels for the week ending March 21, capturing the period before over half of all Americans went into lockdown mode this week—a development that will surely curb the appetite for oil. Oil prices were trading up on Tuesday afternoon prior to the API’s data release on new hopes that a stimulus package would be passed and that the oil price war will come to an end with the US intervening. Read more

Amazing Testimonies On Our Programs

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As we open the 2nd edition of Tekedia Mini-MBA on April 1, I am really happy to share this testimony left here on LinkedIn by Nyebuchi. This second edition is coming with better features and a major strategic partnership to ensure learning is live-tested. Classes will begin June 22, 2020 for four months.

Join hundreds of participants from 14 countries for a new excursion of learning.

Registration for 2nd Edition of Tekedia Mini-MBA Begins April 1

 

Covid-19 – What Facebook Is Doing

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As governments around the world roll out measures to keep their citizens sustained as coronavirus lockdown continues, some companies are doing their best to protect their workforce. From sending them home to providing them with credit facilities they need.

It was disclosed on Tuesday that Facebook is providing its 45,000 employees with six months bonuses and additional $1,000, to help them cope with the coronavirus lockdown.

The social media giant has been notably proactive from day one, working in conjunction with the World Health Organization (WHO), Center for Disease Control (CDC) and other health bodies to ensure that the pandemic is globally contained.

At the same time, it has prioritized the welfare of its staff. The company is also sending thousands of its moderators home but will continue to pay them as part of efforts to help them take care of their families.

“We recognize that many people are going to need more time away to care for children and their families. We also know that many of you may have additional expenses as part of setting up your home to enable remote work and support your family. We’re going to grant all employees an additional $1,000 to use for whatever you see fit to support yourself and your family in adapting during this period,” Zuckerberg said in a memo obtained by NBC News.

Facebook was quick to prohibit false information about coronavirus on its platforms by providing direct links to responsible health bodies and removing fake stories.

“As the COVID-19 outbreak escalates, our focus has been on keeping people safe and informed by making sure everyone has accurate information, supporting global health experts and stopping misinformation. Our thoughts, like everyone’s, are with our loved ones and our communities and all of those impacted around the world,” said Sheryl Sandberg, Chief Operating Officer at Facebook.

Facebook has made a pledge of $100 million in support of small businesses around the world; the aim is to reduce the financial constraint that will emanate from COVID-19 in countries with little financial power.

“We’ve listened to businesses to understand how we can best help them. We’ve heard loud and clear that financial support could enable them to keep the lights on and pay people who can’t come to work,” Sandberg said “That’s why today I’m announcing that Facebook is investing $100 million to help 30,000 small businesses in over 30 countries where our employees live and work.”

As part of the assistance, Facebook is providing training for these companies through Facebook Hub to help them stay afloat.

While other companies in the United States have shown solicitude for their workforce, none has extended the care to businesses outside their own. Facebook happened to be the first American company to take steps in the direction of assisting small businesses in countries where it operates.

Google and Twitter have concentrated on eliminating fake news and false information about the pandemic across their platforms, though Google is working with health authorities to develop a testing device that will help snap up screening of suspected cases.

As the virus spreads, working remotely also surges, increasing the weight of online activities as many people depend on social media to know of happenings around the world. They also depend on the internet to perform virtually all possible works. Facebook is working to provide virtual assistance and flexible internet to help businesses to fulfill their tasks.

“We’ve made our Business Hub… readily available for all. We are also creating new virtual training to support businesses operating in this new and unsettling environment. We want to do more. Teams across our company are working every day to help businesses. We are looking at additional ways to host virtual training – and will have more to share in the coming weeks – and we’re finding more ways to help people connect and learn to use technology through Blueprint… whatever happens next, we will be working to help businesses weather this storm,” Sandberg added.

Mark Zuckerberg announced on Wednesday that Facebook is working hard to see that it provides the needed facilities for companies depending on its services as the demand surges following lockdowns and social distancing.

Coronavirus: A Challenge to Nigeria Beyond its Health System

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The scourge of Coronavirus has come to be a daily reality with Nigeria. From an index case in late February, 2020, confirmed cases have risen to 40. Some people are saying that the number is even underreported. From Lagos State to Ekiti, Osun to Ondo, a number of critical measures have been put in place. Schools at all levels have been shut. Bans have been placed on large gatherings whether temporal or spiritual. Any gathering that is above 50 was the target in some places. In Osun, the ban was total regardless of the number. Lagos is the highest hit in the country. Very Important people have been infected. The son to the former Vice President, Atiku Abubakar, has been diagnosed as having the COVID 19.

The governor of Bauchi State,Bala Mohammed, has put himself in self isolation. The president was even tested . he was negative. The Chief of Staff to the President, Abba Kyari, has tested positive. The major concern is to stop the spread so that the country’s failing health system is not overrun.  However, as the nation races to stem the tide of the disease in the country, the challenge to the nation is beyond the issue of the health system. It is a challenge to all that the country represents – people, government, culture and belief system. This piece focuses on those challenges that the COVID 19 is bringing to the system. Here are the challenges:

The Level of Credibility  conferred on the Government 

For any government to function well in a democratic setting, those who put such in place must have a level of belief in its capacity to govern. There are basic ingredients that make the citizens have some level of trust in their government. These include transparency in its dealings, delivery of electoral promises, prudence in spending of public resources, and zero tolerance for corruption. However, since 1999 when this democratic dispensation commenced, Nigerians have had little or no trust in their governments at all levels. The reason for this is not far-fetched. A lot of the problems confronting the nation are still there despite the billions of Naira that have gone down the drain in the pursuit of these.

The novel virus has come to expose the lack of trust in the system in Nigeria. At the time the Italian index case was reported in the country, some Nigerians did not take the news with a pinch of salt. Some said it was an attempt to make money by the concerned government institutions. People asked for the name of the Italian who brought the virus to the country. As a matter of fact, some were asking for the picture. Social media platforms were abuzz with gist and counter gist on whether the virus was really in Nigeria or not. It is hoped that now that we have had cases of infection being reported by people in high places, those doubting Thomas would believe the Coronavirus is here in Nigeria.

The Professionalism of the Nigerian Media and Journalists

The media are critical to the survival of any country. They not only inform, but also educate, enlighten, and warn people of consequences of events and happenings. Before the advent of the Coronavirus, the nation has been grappling with the extent of professionalism displayed by journalists and the media organization. Concerns have been raised as to the way issues of national importance have been reported by the Nigerian media. For instance, the Nigerian media have been accused to be partisan in their reportage of political issues. Not only that, they have been blamed sometimes for being sectional on issues that are expected to have been looked at from national perspective.

Sensationalism, fake news and hate speech are some of the accusations levelled against the Nigerian press. Experts have queried if Nigeria media have any sense of social responsibility. The roles of the media in any crisis situation, such as the country has on her hand, cannot be over emphasized. The media are expected to provide timely, relevant and accurate report of the situation. They are also to help to create awareness and make popular coping strategies as well as assisting in creating a chart for relief and recovery. In the fight against the spread of the COVID 19, the media are allies. They are not only to report update but also to assist in preventing spread of the virus. Within the framework of a developing nation, the Nigerian media are to report issues surrounding the disease with some level of social responsibility and national patriotism. They should report without creating panic. They should not only focus on numbers, but on issues surrounding the disease.

In a piece nudging the Nigerian media to rise to the challenge that this period poses, Prof. Ayo Ojebode, the Head of Department of Communication & Language Arts, University of Ibadan, advised three professional ethics they have to follow. One, he charged them not to allow the pressure to be the first to publish  to overwhelm and they succumb to publishing information without verifying them. He stated journalists have to fact-check before going to press. He also said there is a need to hold government agencies and institutions accountable over their actions on the Coronavirus pandemic. Two, he posited that Nigerian journalists have to bring human angle into the statistics that would be flying around. He urged them to do interpretative reporting. He said “it is important that we underscore the need for a balance between hope and despair.” Third, Ojebode discouraged journalists from over focusing on the Coronavirus. He said journalists need to resist the temptation of surrendering the mediascape to the “tyranny of coronavirus”

The Level of Responsibility of the people in power and those out of it

At this point of the incidence in the country, the level of responsibility of Nigerians in and out of power has come under attack from Coronavirus. It would test the ability of Nigerians to be responsible for themselves and for others. One unique thing about the novel virus is that the chances of it spreading is premised on how people are collectively careful. It is not about how careful an individual is. It is about the caution of the collective community. So far, the test has yielded different results from both ends. On the part of the ordinary Nigerians, there was a level of unenthusiastic attitude from them. Governments at national and sub national levels have placed bans on social and religious gatherings since Friday. Yet, some Nigerians still went ahead to pray Jumat on Friday. Their Christian counterparts had their church services on Sunday. Another instance is the self-isolation measure of those who travel to high risk countries. Upon arrival, they were urged by government to disclose themselves and self-isolate. Few cases of celebrities who indeed went on self isolation were heard.

On the part of those in power, the level of responsibility is noticed to some extent. Governors, especially in the southwest, accepted the gauntlet thron at them by the invasion of the virus. Oyo, Ekiti, Osun and Ogun had their governors address the citizens. They reeled out measures put in place to ensure the virus did not spread. The president had to be called out severally before he eventually addressed the nation. Despite, Nigerians were high on social media platforms making jest of the president’s speech. Some senators and members of the house of representatives were said to have been exposed to the virus. They have refused to declare their status or even self isolate. Gestures such as these can never assist the campaign. Yet, to conquer the spread, there is a need to up the level of responsibility of the two divides of the Nigerian life.

In the next few weeks, the situation is dicey for Nigeria on COVID 19. The statistics has the tendency to go higher. Things are happening at a very dizzying pace. No one could say what happens. But, whatever happens then will be a factor of those issues being challenged by the novel virus. I hope we take the challenge with equanimity and rise above it.